Why did the Minbos Resources (ASX:MNB) share price leap 18% today?

The phosphate specialist has received the thumbs up for its green ammonia plans in Angola

| More on:
A female superhero dressed in shiny green with a mask leaps in the sky with leg and arm outstretched in a leaping action.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Minbos Resources Ltd (ASX: MNB) share price is on the rise today.

At the time of writing, shares in the Australian-based phosphate specialist are swapping hands for 18 cents apiece, up 5.88%. In early trade, they were as high as 20 cents, which represents a 17.6% gain on the previous closing price.

This comes after the company announced a key update regarding the production of nitrogen fertiliser and green ammonia in Angola.

Here are the details out of the Minbos camp today.

What was announced?

In news possibly fuelling the Minbos Resources share price, the company has received support from the Angolan Ministry of Agriculture to produce green ammonia and nitrogen fertiliser in the country.

This came after Minbos submitted a letter of intent (LOI) to several departments in the Angolan cabinet seeking approval.

The LOI contained a proposal to "develop a nitrogen fertiliser facility using green ammonia produced from hydroelectric power from the Capanda Hydroelectric Dam".

For reference, the Capanda Hydroelectric Dam is located on the Kwanza River, Angola. It generates a total installed capacity of 520 megawatts from four turbines.

Minbos intends to produce nitrogen fertiliser from green ammonia by adding nitrogen to phosphate from its Cabinda Phosphate project. It will sell the fertiliser locally to what the company claims is one of the world's most prospective agricultural regions.

Pleasingly, the Ministry has agreed to provide the necessary support to Minbos to ensure the implementation of the project.

The proposed location of the facility is strategically located "within trucking distance to the Malange agricultural corridor and major regional mining projects".

This should reduce transport and distribution costs, ensuring a competitive cost advantage, the company says.

From its discussions with the Ministry of Energy in Angola, Minbos confirms 100 megawatts of hydropower is available for the project. It can also make a submission for a "staged tariff structure to offset high fixed costs during the market development phase".

Speaking on the announcement likely driving the Minbos Resources share price, CEO Lindsay Reed said:

Green ammonia is a natural progression for Minbos and its NPK for Angola strategy and a great opportunity for Angola to establish a competitive sustainable fertiliser industry to underpin the development of its agricultural sector. We are excited about advancing this project with the support of the Angolan Government.

Minbos Resources share price snapshot

The Minbos Resources share price has been an absolute star on the ASX these past 12 months. It has climbed around 350% during that time, and 370% this year to date.

That's a galaxy away from the S&P/ASX 200 index (ASX: XJO)'s gain of around 25% in the last 12 months and 10% year to date.

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Resources Shares

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Resources Shares

Why did the Fortescue share price fall 7% in October?

Let's review what happened with the ASX 200 mining giant in October.

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Resources Shares

Why did the BHP share price get hammered in October?

ASX 200 investors sent BHP shares sharply lower in October. But why?

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Resources Shares

Gina Rinehart's empire raked in another $5.6 billion. Here's how

Resources and mining continue to dominate the Australian market.

Read more »

two men in business suits sit across from each other at a table with a chess board on it. Both hold their hands to their chins and look down in serious contemplation of their next move.
Resources Shares

'Not ruled out': Could BHP still buy Anglo-American?

This mega-deal might not be as dead as it looks.

Read more »

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Resources Shares

Mineral Resources share price rockets 16% on $1.1 billion news!

ASX 200 investors appear thrilled with Mineral Resources' latest news.

Read more »

Miner looking at a tablet.
Resources Shares

Here are the latest share price forecasts for Fortescue

Let’s unearth what analysts think could happen with this iron ore miner.

Read more »

A businesswoman ponders why her boat is sinking in the ocean.
Resources Shares

Lake Resources share price sinks on quarterly cash flow news

Let's take a look at the highlights of the company's Q3 update.

Read more »

A company manager presents the ASX company earnings report to shareholders at an AGM.
Resources Shares

Why today is a big day for BHP shares

Guess why everyone’s talking about BHP shares today.

Read more »